At the core of the fake account scandal surrounding Wells Fargo right now is the fact that more than 5,000 of the bank’s former employees opened more than 2 million fake accounts to get sales bonuses.
As the Wells Fargo situation works it way through various political and legal machinations, the state of New York is taking measures to ensure that similar behavior, which led to a $185 million fine for Wells Fargo, doesn’t happen again.
New York Gov. Andrew Cuomo announced Tuesday that the state’s financial regulator, the New York Department of Financial Services, is issuing “new guidance” designed to restrict incentive pay for bank employees, requiring banks to tie those incentives to proper corporate behavior.
According to Cuomo’s office, the NYDFS guidance directs all state-regulated banks in New York to ensure any employee incentive arrangements do not encourage “inappropriate corporate practices.”